Exam 5: Recording, Storing and Reporting Accounting Information

______________ is the process of transferring the debit and credit information for each journal entry to the accounts in a business' general ledger.

A chart of accounts is a numbering system designed to organise a business account efficiently and to reduce errors in the recording and accumulating process.

The general ledger is the most important ledger because balances of accounts contained within it are used to draw up the Trial Balance and subsequently the financial reports.

An income statement is the financial statement that summarises the result of a business' earnings activities, that is:

An ________________ is a means by which a business identifies, measures, records and retains accounting information about its activities so that it can report this information in its financial statements.

Which of the following best describes a general ledger?

The accounts receivable account tells us how much is owed in total by debtors, but it does not tell us which debtors owe which amounts.

An ____________ _____________ is an expense that a business has incurred during the accounting period but that it has not paid or recorded.

Bruce Li commenced his concrete polishing business on 1 July 2018, trading as Li Concrete Polishing. The transactions for his first month of business are given below. Bruce Li records the payments for insurance as a prepayment (Prepaid Insurance) and records the corresponding expenses on balance date. Further information as at 31 July 2018: • Mobile telephone phone expenses of $400 were owing for July. An invoice had not been received on balance date. • The depreciation expense for the equipment for July is determined to be $270. • Insurance prepaid for August and September is $400. • Services performed but not invoiced amounted to $700. Prepare all of the journal entries for the above transactions (narrations are not required).

A general journal only needs to include the accounts to be debited and credited for the transaction and the accounts to be debited and credited.

Each asset account typically has a credit balance.

Which one of the following accounts must be closed to zero at the end of the accounting period?

Explain the order in which a business prepares it financial statements.

The major steps involved in the accounting cycle include recording the transaction in the general journal, posting the journal entries, recording adjusting entries, preparing the financial statements and posting closing entries.

Which one of the following is NOT a characteristic of a T account?

A ____________ _____________ is a schedule that lists the titles of all the accounts in a business' general ledger, the debit or credit balance of each account and the totals of the debit and credit balances.

Which one of the following is NOT an example of a prepaid expense?

In accounting 'posting' refers to:

The owner's equity of a company is called ____________ _____________.

Briefly explain the purpose of general ledger accounts and provide some examples of these accounts.